Question 1

When bank loan officers screen loan applicants to eliminate potentially bad risks,they are attempting to mitigate the problem of

Accepted Answer

A)  adverse selection. 
B)  moral hazard. 
C)  interest rate risk. 
D)  illiquidity. 
A)  adverse selection. 
B)  moral hazard. 
C)  interest rate risk. 
D)  illiquidity.

Question 2

Compare the characteristics of loans and marketable securities in terms of liquidity,risk,and information costs.

Accepted Answer

Loans are less liquid than mar

Question 3

Standby letters of credit

Accepted Answer

A)  are a form of swaps. 
B)  are a promise by a bank to lend the borrower funds to pay off its maturing commercial paper. 
C)  are a promise by a large depositor to provide additional funds to a bank should the bank face an unexpectedly large deposit outflow. 
D)  represent the unused balance on a bank credit card. 
A)  are a form of swaps. 
B)  are a promise by a bank to lend the borrower funds to pay off its maturing commercial paper. 
C)  are a promise by a large depositor to provide additional funds to a bank should the bank face an unexpectedly large deposit outflow. 
D)  represent the unused balance on a bank credit card.

Question 4

Which of the following is NOT covered by federal deposit insurance?

Accepted Answer

A)  savings account 
B)  money market mutual fund 
C)  checking account 
D)  money market deposit account 
A)  savings account 
B)  money market mutual fund 
C)  checking account 
D)  money market deposit account

Question 5

In 2016,net worth was about what percentage of total funds raised by banks?

Accepted Answer

A)  2% 
B)  7% 
C)  14% 
D)  35% 
A)  2% 
B)  7% 
C)  14% 
D)  35%

Question 6

Any reserves beyond what is required are called

Accepted Answer

A)  required reserves. 
B)  excess reserves. 
C)  secondary reserves. 
D)  bank capital. 
A)  required reserves. 
B)  excess reserves. 
C)  secondary reserves. 
D)  bank capital.

Question 7

For a bank,the ratio of after-tax profit to assets is its

Accepted Answer

A)  net interest margin. 
B)  return on assets. 
C)  return on equity. 
D)  spread. 
A)  net interest margin. 
B)  return on assets. 
C)  return on equity. 
D)  spread.

Question 8

All of the following are examples of borrowings by a bank EXCEPT

Accepted Answer

A)  federal funds. 
B)  repurchase agreements. 
C)  discount loans. 
D)  commercial loans. 
A)  federal funds. 
B)  repurchase agreements. 
C)  discount loans. 
D)  commercial loans.

Question 9

A bank that expects interest rates to fall will

Accepted Answer

A)  want the duration of its assets to be greater than the duration of its liabilities-a positive duration gap. 
B)  want the duration of its assets to be less than the duration of its liabilities-a positive duration gap. 
C)  want the duration of its assets to be greater than the duration of its liabilities-a negative duration gap. 
D)  want the duration of its assets to be less than the duration of its liabilities-a negative duration gap. 
A)  want the duration of its assets to be greater than the duration of its liabilities-a positive duration gap. 
B)  want the duration of its assets to be less than the duration of its liabilities-a positive duration gap. 
C)  want the duration of its assets to be greater than the duration of its liabilities-a negative duration gap. 
D)  want the duration of its assets to be less than the duration of its liabilities-a negative duration gap.

Question 10

About what percentage of bank assets were loans in 2016?

Accepted Answer

A)  11% 
B)  22% 
C)  37% 
D)  59% 
A)  11% 
B)  22% 
C)  37% 
D)  59%

Question 11

As of 2016,about how many banks were there in the United States?

Accepted Answer

A)  57 
B)  2,200 
C)  5,000 
D)  14,200 
A)  57 
B)  2,200 
C)  5,000 
D)  14,200

Question 12

What is the current limit on balances that are covered by federal deposit insurance?

Accepted Answer

A)  $100,000 
B)  $250,000 
C)  $500,000 
D)  $1,000,000 
A)  $100,000 
B)  $250,000 
C)  $500,000 
D)  $1,000,000

Question 13

On a bank's balance sheet,total assets are equal to

Accepted Answer

A)  total liabilities. 
B)  bank capital. 
C)  total liabilities plus bank capital. 
D)  total liabilities minus bank capital. 
A)  total liabilities. 
B)  bank capital. 
C)  total liabilities plus bank capital. 
D)  total liabilities minus bank capital.

Question 14

Loans by the Federal Reserve to banks are known as

Accepted Answer

A)  repurchase agreements. 
B)  federal funds. 
C)  discount loans. 
D)  cash items in the process of collection. 
A)  repurchase agreements. 
B)  federal funds. 
C)  discount loans. 
D)  cash items in the process of collection.

Question 15

Which of the following is NOT an example of off-balance-sheet lending?

Accepted Answer

A)  a swap 
B)  a standby letter of credit 
C)  a loan commitment 
D)  a loan sale 
A)  a swap 
B)  a standby letter of credit 
C)  a loan commitment 
D)  a loan sale

Question 16

By 2015,what share of U.S.assets were held by the 10 largest banks in the United States?

Accepted Answer

A)  10% 
B)  29% 
C)  53% 
D)  68% 
A)  10% 
B)  29% 
C)  53% 
D)  68%

Question 17

If you have a checking account at First National Bank,the account is

Accepted Answer

A)  an asset to both you and First National. 
B)  a liability to both you and First National. 
C)  an asset to First National and a liability to you. 
D)  an asset to you and a liability to First National. 
A)  an asset to both you and First National. 
B)  a liability to both you and First National. 
C)  an asset to First National and a liability to you. 
D)  an asset to you and a liability to First National.

Question 18

The difference between a savings deposit and a time deposit is

Accepted Answer

A)  time deposits pay no interest. 
B)  savings deposits pay no interest. 
C)  time deposits have specified maturities. 
D)  savings deposits have specified maturities. 
A)  time deposits pay no interest. 
B)  savings deposits pay no interest. 
C)  time deposits have specified maturities. 
D)  savings deposits have specified maturities.

Question 19

If you deposit $300 in your bank and the required reserve ratio is 10%,your bank will have

Accepted Answer

A)  an increase in required reserves of $300. 
B)  an increase in required reserves of $270. 
C)  an increase in required reserves of $3,000. 
D)  an increase in required reserves of $30 and an increase in excess reserves of $270. 
A)  an increase in required reserves of $300. 
B)  an increase in required reserves of $270. 
C)  an increase in required reserves of $3,000. 
D)  an increase in required reserves of $30 and an increase in excess reserves of $270.

Question 20

On a bank's balance sheet,"borrowings" are

Accepted Answer

A)  loans to households. 
B)  loans to businesses. 
C)  nondeposit liabilities. 
D)  U.S. Treasury securities. 
A)  loans to households. 
B)  loans to businesses. 
C)  nondeposit liabilities. 
D)  U.S. Treasury securities.

When bank loan officers screen loan applicants to eliminate potentially bad risks,they are attempting to mitigate the problem of

Compare the characteristics of loans and marketable securities in terms of liquidity,risk,and information costs.

Standby letters of credit

Which of the following is NOT covered by federal deposit insurance?

In 2016,net worth was about what percentage of total funds raised by banks?

Any reserves beyond what is required are called

For a bank,the ratio of after-tax profit to assets is its

All of the following are examples of borrowings by a bank EXCEPT

A bank that expects interest rates to fall will

About what percentage of bank assets were loans in 2016?

As of 2016,about how many banks were there in the United States?

What is the current limit on balances that are covered by federal deposit insurance?

On a bank's balance sheet,total assets are equal to

Loans by the Federal Reserve to banks are known as

Which of the following is NOT an example of off-balance-sheet lending?

By 2015,what share of U.S.assets were held by the 10 largest banks in the United States?

If you have a checking account at First National Bank,the account is

The difference between a savings deposit and a time deposit is

If you deposit $300 in your bank and the required reserve ratio is 10%,your bank will have

On a bank's balance sheet,"borrowings" are

Introducing Money and the Financial System

Money and the Payments System

Interest Rates and Rates of Return

Determining Interest Rates

The Risk Structure and Term Structure of Interest Rates

The Stock Market, information, and Financial Market Efficiency

Derivatives and Derivative Markets

The Market for Foreign Exchange

Transactions Costs, asymmetric Information, and the Structure of the Financial System

Beyond Commercial Banks: Shadow Banks and Nonbank Financial Institutions

Financial Crises and Financial Regulation

The Federal Reserve and Central Banking

The Federal Reserves Balance Sheet and the Money Supply Process

Monetary Policy

The International Financial System and Monetary Policy

Monetary Theory I- the Aggregate Demand and Aggregate Supply Model

Monetary Theory Ii: the Is-Mp Model

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Exam 10: The Economics of Banking

When bank loan officers screen loan applicants to eliminate potentially bad risks,they are attempting to mitigate the problem of

Compare the characteristics of loans and marketable securities in terms of liquidity,risk,and information costs.

Standby letters of credit

Which of the following is NOT covered by federal deposit insurance?

In 2016,net worth was about what percentage of total funds raised by banks?

Any reserves beyond what is required are called

For a bank,the ratio of after-tax profit to assets is its

All of the following are examples of borrowings by a bank EXCEPT

A bank that expects interest rates to fall will

About what percentage of bank assets were loans in 2016?

As of 2016,about how many banks were there in the United States?

What is the current limit on balances that are covered by federal deposit insurance?

On a bank's balance sheet,total assets are equal to

Loans by the Federal Reserve to banks are known as

Which of the following is NOT an example of off-balance-sheet lending?

By 2015,what share of U.S.assets were held by the 10 largest banks in the United States?

If you have a checking account at First National Bank,the account is

The difference between a savings deposit and a time deposit is

If you deposit $300 in your bank and the required reserve ratio is 10%,your bank will have

On a bank's balance sheet,"borrowings" are

Introducing Money and the Financial System

Money and the Payments System

Interest Rates and Rates of Return

Determining Interest Rates

The Risk Structure and Term Structure of Interest Rates

The Stock Market, information, and Financial Market Efficiency

Derivatives and Derivative Markets

The Market for Foreign Exchange

Transactions Costs, asymmetric Information, and the Structure of the Financial System

Beyond Commercial Banks: Shadow Banks and Nonbank Financial Institutions

Financial Crises and Financial Regulation

The Federal Reserve and Central Banking

The Federal Reserves Balance Sheet and the Money Supply Process

Monetary Policy

The International Financial System and Monetary Policy

Monetary Theory I- the Aggregate Demand and Aggregate Supply Model

Monetary Theory Ii: the Is-Mp Model

Filters